Shein’s Meteoric Rise

One outcome of the Trump administration’s new tariffs against China, Canada and Mexico, is an end to the "de minimis" exemption for the three countries - at least, temporarily. This is a 100-year-old trade loophole that lets exporters ship packages worth under $800 per recipient per day to the U.S. duty free. Several Chinese ecommerce giants such as Shein, Temu and AliExpress, are among the companies likely to be impacted by the change, as they have until now kept prices low partly due to avoiding such tariffs. By contrast, traditional retailers bringing in bulk shipments have needed to keep paying the fees.

Founded in Nanjing, China, in 2008, Shein has grown to become one of the world’s most valuable unicorns. Analysts from ECDB show how the company's online revenue has quickly outpaced that of several traditional fashion competitors, including H&M and Zara. During the pandemic when people were stuck at home and turned online to shop, Shein saw its online net sales jump from US$2.5 billion in 2019 to US$8.4 billion in 2020. In the years since, Shein has continued to follow a strong upward trajectory, even despite the app having been banned in India in 2020 following escalating bilateral tensions with China.

ECDB analysts estimated that Shein would generate $48 billion in online revenue by 2024. This is an increase of more than 3,300 percent since 2018, when the fast-fashion company’s net sales amounted to $1.4 billion.